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Attorney and CPA Chad D. Cummings notes that redomestication and statutory conversion are related concepts, but they are not synonymous. Redomestication is the broader objective: moving the legal domicile of an existing LLC or corporation from one state to another while preserving continuity. Statutory conversion is one legal mechanism that can be used to accomplish that objective. When available and appropriate, a statutory conversion allows the existing company to continue in the destination state rather than dissolving it and forming a replacement. The same business continues, including the same federal employer identification number, business history, contracts, credit relationships, and other attributes. People often search their former state’s statutes, fail to find a provision expressly authorizing an outbound statutory conversion, and conclude that the company cannot be redomesticated. That conclusion is wrong. All 50 states permit businesses to accomplish an interstate change of domicile, but the terminology and methodology vary substantially across state lines. Direct statutory conversion is one method. It is not the definition of redomestication, and the absence of a direct statutory-conversion procedure does not necessarily prevent the company from changing its domicile. Where direct statutory conversion is unavailable, experienced counsel may be able to use another legally recognized method, including a hybrid merger or another transaction designed around the laws of the two jurisdictions. The appropriate mechanism depends upon the company’s existing state, destination state, entity type, governing documents, tax classification, and other circumstances. Different states use conversion, domestication, continuation, merger, and similar terminology differently. Selecting the wrong procedure can leave the company registered in the wrong state, terminate an entity that was supposed to continue, create unnecessary transfers of assets, or introduce federal and state tax problems. An accepted filing does not necessarily establish that the entire legal and tax transaction was structured correctly. Florida and Texas impose no personal income tax. Redomestication can move an existing company without dissolving it. Statutory conversion is one way to redomesticate a business. Redomestication is the broader process. If statutory conversion is not available, that does not necessarily mean the move is impossible. Determining that “my state does not allow conversion” should be the beginning of the legal analysis, not the end of it. Learn about the differences between redomestication vs. statutory conversion: https://www.cummings.law/redomestication-vs-statutory-conversion/

Attorney and CPA Chad D. Cummings notes that Proposition 40 did not pass, but if you were waiting for the California billionaire wealth tax to disappear before deciding whether to move yourself or your company, the answer is almost the opposite. Proposition 40’s defeat did not eliminate the uncertainty. It gave the people who want a California wealth tax a detailed postmortem showing them exactly where the proposal failed and what they need to change before they try again. They have already said they intend to try again. Roughly 47 percent of voters still supported it. Its proponents now know where the political resistance is, which features of the measure were vulnerable, and what happened when retroactivity, valuation of private businesses, and the one-time structure were put in front of voters. The next proposal does not have to look exactly like Proposition 40. Proposition 42 passed as well and creates a new obstacle to future wealth taxes by restricting new taxes on financial assets and other personal property. Proposition 42 itself can be changed by California voters. Proposition 40 lost. The underlying political movement did not disappear. Election Day was November 3, but Proposition 40 was not finally called until November 9, nearly a full week later. California law permits ballots to continue arriving and being processed after Election Day. From the standpoint of somebody making financial and business decisions, Californians spent almost a week not knowing whether an unprecedented wealth tax had passed. Since Proposition 40 was defeated, inquiries from California business owners interested in moving their companies out of the state through redomestication have increased, not decreased. Many owners appear to have reached a different conclusion: the fact that Proposition 40 came this close, attracted this much political support, and is already expected to return is itself information about California’s future direction. Florida and Texas impose no personal income tax and no wealth tax. Redomestication can move an existing company without dissolving it, preserving the same federal employer identification number, business history, contracts, and credit relationships. All 50 states permit an interstate change of domicile, although the terminology and methodology vary considerably. The relevant question after Proposition 40 is not simply whether the tax passed. It did not. The better question is what California just told you about the probability distribution of future tax policy. Its proponents learned from the failure. They have already said they are coming back. For business owners making decisions measured in decades rather than election cycles, that may create more reason to examine California domicile now, not less. Learn more about how to move your business out of California: https://www.cummings.law/redomestication/move-business-out-of-california/

nd financial history remain intact or have to be rebuilt. With redomestication, continuity is the objective. The same company continues with the same federal employer identification number, or FEIN, existing contracts, credit history, banking relationships, tax elections, customer relationships, and, in most cases, business name. There is no unnecessary transfer of the business from one entity to another because the existing entity is the one changing states. If the business has permanently left its former state, redomestication can also eliminate the need to maintain duplicate registrations and obligations there, subject to whatever continuing tax nexus or other obligations remain. Dissolving and reorganizing is fundamentally different. You terminate the old entity and form a new one in the destination state. Now you have to determine what happens to everything the original company owned or was party to. Contracts may need to be assigned or renegotiated. Bank accounts, credit relationships, assets, licenses, and other rights may need to be transferred. The new entity may require a different FEIN. More importantly, dissolving or transferring assets between separate entities can have federal and state tax consequences that do not exist merely because the same owners remain involved. What looked like the simple solution can become a legal and tax reconstruction project. The danger is doing any of this in the wrong order. Dissolving the original company before the interstate transaction has been properly structured can destroy the continuity you were trying to preserve. Once the entity is gone, fixing the mistake may require far more than filing another form. You can create questions involving ownership of assets, existing contracts, tax accounts, elections, and even whether the operating business is now sitting inside the legal entity you think owns it. Repairing a broken transaction can cost tens of thousands of dollars and, in serious cases, hundreds of thousands. Redomestication avoids that unnecessary restart, but it is not a uniform national procedure. All 50 states permit businesses to accomplish interstate changes of domicile, but the terminology and methodology vary substantially across state lines. A transaction may involve a Plan of Conversion, written approval by the appropriate principals, Articles or Certificates of Conversion, formation instruments, and coordinated filings in both states. Similar terminology can mean different things in different jurisdictions, which makes copying documents from another transaction particularly dangerous. That is why attorney and CPA involvement matters. Redomestication touches the business laws of two states plus federal and state taxation. A Secretary of State can accept a document without determining whether you preserved your FEIN, tax elections, contracts, or entity continuity. The forms are only part of the transaction. The legal plan, approvals, sequence, and tax treatment determine whether the move actually works. So the distinction is straightforward. Dissolving and reorganizing kills the existing company and attempts to rebuild the business inside another one. Redomestication moves the existing company while preserving it. Same company. Same FEIN. Same history. New legal home. If you already have something worth preserving, destroying it first and hoping you can recreate everything afterward is usually the more dangerous path. Learn about the difference between redomestication and dissolving a company: https://www.cummings.law/redomestication/

Attorney and CPA Chad D. Cummings notes that redomestication and forming a new company can both result in a business operating from a different state, but legally they are very different transactions. Redomestication moves the existing LLC or corporation to a new state while preserving continuity. Forming a new company creates a separate legal entity and then forces you to determine how everything belonging to the old company gets transferred to the new one. With redomestication, the same federal employer identification number is maintained, along with the company’s business history, credit history, contracts, banking relationships, tax elections, and, in most cases, its name. Forming a new company means creating a separate legal person and then dealing with the old company. That can mean transferring contracts, assets, intellectual property, bank accounts, licenses, and financing arrangements from one entity to another. You may also be dealing with a new FEIN and a different federal taxpayer. A contract containing an anti-assignment provision, a loan agreement requiring lender consent, or a professional license issued to the existing entity can turn what looked like an easy move into a significant legal problem. Moving assets or operations from one taxpayer to another is not automatically tax neutral merely because the same people own both companies. A company with an S corporation election, appreciated assets, or substantial goodwill should not assume that shutting down one entity and opening another is economically equivalent to moving the existing company. All 50 states permit interstate changes of domicile, but the terminology and methodology vary considerably. One state may describe the transaction as a conversion, another as domestication. The transaction can require a Plan of Conversion, formal approval, coordinated state filings, and attention to tax accounts, licenses, and payroll. A do-it-yourself mistake can leave you with two companies when you wanted one, no company when you thought you had continuity, or an FEIN attached to a company that no longer exists in the form you intended. Florida and Texas impose no personal income tax. Redomestication can move an existing company without dissolving it. Forming a new company means starting with a new legal entity. Redomestication means moving the existing company. Same company. Same FEIN. Same history. New legal home. For an established business, preserving what already exists is usually far more important than how easy it looks to form a new LLC online. Learn more about the differences between redomestication vs. forming a new company: https://www.cummings.law/redomestication/

Attorney and CPA Chad D. Cummings notes that redomestication and foreign qualification are not two different names for the same thing. Redomestication changes the legal home state of an existing company. Foreign qualification leaves the company domiciled exactly where it is and simply registers that company for permission to do business in another state. If your company is permanently moving from California to Florida, redomestication is designed to make Florida the company’s new legal home. Foreign qualification would leave the company domiciled in California while adding a Florida registration on top of it. With redomestication, the same legal entity continues in the new state with the same federal employer identification number, existing contracts, bank accounts, credit history, and business history. Assuming the company has actually ceased operations in the former state and no longer has tax nexus there, redomestication can also eliminate the need to continue maintaining registrations and paying taxes associated solely with the former domicile. Foreign qualification generally does the opposite. You retain the original company in the original state and add another layer of registration, annual filings, fees, and potentially tax obligations in the second state. Foreign qualification has a legitimate purpose when a company remains based in one state but begins doing business in another. A Texas company opening an office in Georgia does not necessarily need to move its legal domicile. But if the owners, management, and operations have permanently relocated, keeping the old domicile alive through foreign qualification can create years of unnecessary administrative and tax baggage. All 50 states permit interstate changes of domicile, but the terminology and methodology vary significantly. Different states use terms such as conversion, domestication, redomiciling, foreign registration, and qualification in ways that are not always intuitive. A state filing office can accept a document without confirming that your FEIN, tax treatment, contracts, or overall transaction have been handled correctly. Florida and Texas impose no personal income tax. Redomestication can move an existing company without dissolving it. Foreign qualification lets your existing company operate in an additional state. Redomestication moves the company’s legal home. Same entity. Same FEIN. Same history. Different domicile. If you are permanently relocating the business rather than expanding into another jurisdiction, confusing those two concepts can cost far more than getting the transaction right from the beginning. Learn more about the difference between redomestication versus foreign qualification: https://www.cummings.law/redomestication/

Attorney and CPA Chad D. Cummings notes that if you want to transfer an existing business to another state without starting over, the objective is not to form a second company. The objective is to move the company you already own. Through business redomestication, an existing LLC or corporation can change its legal home state while maintaining continuity. That means keeping the same federal employer identification number, along with the company’s existing contracts, credit history, banking relationships, tax elections, customer relationships, and, in most cases, its name. Dissolving the old company and forming a replacement can force you to address contracts, bank accounts, financing, business credit, licenses, and ownership of company assets. There is no single national form called “move my company.” All 50 states permit an interstate change of domicile, but the terminology and methodology vary. Different jurisdictions use terms such as conversion, domestication, and redomiciling, and the required documents and filing sequence can differ. A proper transaction generally begins with a Plan of Conversion and the legal instrument adopting that plan. The required state filings are then prepared and submitted in coordination with the company’s former and destination states. Omitting the Plan of Conversion or simply filing formation documents can create unforeseen legal and tax complications. A state can accept a document without determining whether the entire transaction was properly structured from a legal or tax perspective. Filing the wrong document, forming a replacement entity when you intended continuity, or dissolving the original company prematurely can result in rejected filings, penalties, IRS problems, or termination of the business. Repairing a broken transaction can cost tens of thousands of dollars and, in some cases, hundreds of thousands. Florida and Texas impose no personal income tax. Redomestication can move an existing company without dissolving it. Keep the existing company. Keep the FEIN. Change the legal home. The objective is simple. Executing it correctly requires experienced legal and tax judgment. Learn how to transfer a business to another state without starting over: https://www.cummings.law/redomestication/

Attorney and CPA Chad D. Cummings notes that if you already have an LLC or corporation and you are moving to another state, you generally do not need to throw away the company you already built. Through redomestication, the existing company changes its state of legal domicile while the business itself continues. Properly structured, you maintain the same federal employer identification number, together with the same legal entity, contracts, bank accounts, credit history, business history, and, in most cases, company name. You are not dissolving the old business, creating a replacement entity, and obtaining a new FEIN. That distinction matters once the business has accumulated real value: ten years of credit, customer contracts, bank relationships, an S corporation election, financing, and vendor accounts. Creating a brand-new entity can introduce questions about which company owns what and whether the federal tax identity still applies. All 50 states permit an interstate change of domicile, but the terminology and methodology vary extensively. One jurisdiction may talk about Articles of Conversion. Another may use a Certificate of Conversion. Similar words can mean different things in different states. The transaction has to satisfy the business laws of both the state you are leaving and the state you are entering. That generally involves a Plan of Conversion, formal approval documents, destination-state filings, former-state filings, and a coordinated sequence. A Secretary of State form is not the transaction. Filing a certificate of formation by itself, dissolving the original company too early, or using a generic online template can create rejected filings, tax problems, or termination of the company. An accepted state filing does not mean somebody has confirmed that your FEIN, tax treatment, contracts, and legal continuity are intact. Florida and Texas impose no personal income tax. Redomestication can move an existing company without dissolving it. Change the state, keep the company, and keep the FEIN. The concept is straightforward. The execution is where experience matters. Learn how to move an existing business to another state: https://www.cummings.law/redomestication/

Attorney and CPA Chad D. Cummings notes that changing a company’s state of domicile means moving the legal home of an existing LLC or corporation from one state to another without throwing away the company you already built. Properly structured, the existing business continues with the same federal employer identification number, together with its business history, contracts, credit history, bank relationships, tax elections, and, in most cases, its name. You are not dissolving the original company and creating a replacement, and you are not transferring all of the assets from one company to another unless there is a specific reason to structure the transaction that way. All 50 states permit an interstate change of domicile, but the terminology and methodology vary significantly. One state may require Articles of Conversion. Another may use a Certificate of Conversion. Similar terminology can describe different legal transactions in different jurisdictions. The process generally requires a Plan of Conversion, formal written approval, conversion documents, and organizational documents for the destination state, filed in the correct sequence. A downloadable form on a Secretary of State website does not, by itself, accomplish the legal transaction. A Secretary of State can accept a filing that is incomplete from the standpoint of the overall transaction. Filing the wrong document, omitting a Plan of Conversion, or dissolving the original entity prematurely can result in rejected filings, loss of good standing, IRS problems, or termination of the business itself. Repairing a broken transaction can cost tens of thousands of dollars and, in some cases, hundreds of thousands. Florida and Texas impose no personal income tax. Redomestication can move an existing company without dissolving it. Same business. Same history. Same federal tax identity. New legal home. The objective is simple. The execution is not. Learn how to change a company's state of domicile: https://www.cummings.law/redomestication/

Attorney and CPA Chad D. Cummings notes that to redomesticate a business means to change the legal home state of an existing LLC or corporation without replacing the company you already have. The business continues. Its existing federal employer identification number is maintained, along with its business history, credit history, existing contracts, banking relationships, tax elections, and, in most cases, its name. You are not dissolving one company and creating another that merely looks similar. You are moving the existing company from one jurisdiction to another while preserving continuity. It is different from merely registering the existing company as a foreign entity in another state, and it is fundamentally different from dissolving the company or creating a replacement entity. All 50 states permit an interstate change of domicile, but the terminology and methodology vary extensively. One jurisdiction may call a filing Articles of Conversion. Another may use a Certificate of Conversion. Similar words can describe legally different transactions. The process can require a Plan of Conversion, formal written approval, coordinated filings in two jurisdictions, and separate attention to tax accounts, licenses, and payroll. A Secretary of State website form, standing alone, does not mean the transaction was accomplished correctly. A filing can be accepted by a state and still leave serious underlying defects. Filing the wrong instrument, omitting a prerequisite document, or dissolving the company prematurely can lead to rejected filings, penalties, IRS problems, or termination of the business itself. Florida and Texas impose no personal income tax. Redomestication can move an existing company without dissolving it. Same company. Same FEIN. Same history. New legal home. The concept is easy to understand. The danger lies in assuming that because the objective is simple, the legal execution must be simple too. Learn what it means to redomesticate a business: https://www.cummings.law/redomestication/

Attorney and CPA Chad D. Cummings notes that business redomestication works by legally moving the same existing LLC or corporation from one state to another while preserving continuity. The company does not start over. Its existing federal employer identification number is maintained, along with its business history, contracts, credit history, bank relationships, and, in most cases, its name. The process begins with documents prepared specifically for the transaction, generally including a Plan of Conversion, written owner or management approval, Articles of Conversion, and organizational documents for the destination state. All 50 states permit an interstate change of domicile, but the terminology and methodology vary dramatically. One state may call a document Articles of Conversion. Another may use a Certificate of Conversion. Similar terminology can describe something legally different somewhere else. After the principals approve and execute the documents according to the governing documents and applicable law, the filings are submitted to the destination state’s Secretary of State or equivalent agency. Once the destination state approves the transaction, the required filing is made with the prior state. Filing something prematurely, dissolving the original company, or creating what is actually a new company can destroy the continuity the owner was trying to preserve. A filing accepted by a Secretary of State does not necessarily mean the transaction was structured correctly for legal or tax purposes. State tax accounts, payroll registrations, licenses, permits, and IRS records may also need attention. Florida and Texas impose no personal income tax. Redomestication can move an existing company without dissolving it. Same business. Same FEIN. Same history. New legal home. The concept is simple. The execution is where people get hurt. Learn about how business redomestication works: https://www.cummings.law/redomestication/

Attorney and CPA Chad D. Cummings notes that business redomestication is the legal process of moving an existing LLC or corporation from one state to another without starting the company over. You are not creating a replacement company, transferring everything into a new entity, abandoning business history, or applying for a new federal employer identification number. Properly completed, it preserves the existing company, including its FEIN, business history, credit history, existing contracts, and, in most cases, its name. The legal home changes. The company continues. That continuity matters for an established business with banking relationships, tax elections, and vendor contracts. All 50 states permit interstate changes of domicile, but the terminology and methodology vary substantially. One jurisdiction may require a certificate of conversion, another articles of conversion, another a statement of domestication. Similar words can describe legally different transactions. A proper transaction can require a customized plan of conversion, formal approvals, coordinated filings in both states, and separate attention to tax accounts, licenses, and payroll. A Secretary of State can accept a filing that still leaves the transaction badly structured. The wrong document, the wrong sequence, or an improperly terminated entity can create rejected filings, tax problems, loss of good standing, or termination of the company itself. Florida and Texas impose no personal income tax. Redomestication can move an existing company without dissolving it. Same company. Same FEIN. Same history. Different home state. The concept is straightforward. The legal and tax mechanics are not. Learn about moving your company to a new state: https://www.cummings.law/redomestication/

Attorney and CPA Chad D. Cummings notes that California is about to vote on Proposition 40, and two economists looking at the same tax have reached conclusions so far apart that the disagreement itself is the story. UC Berkeley economist Gabriel Zucman and his coauthors estimate the one-time 5 percent billionaire wealth tax could raise roughly $100 billion. Stanford economist Joshua Rauh and coauthor Benjamin Jaros estimate that, after accounting for billionaire departures, litigation, and the loss of future income-tax revenue, the measure could ultimately cost California about $39 billion. One model says the state gains $100 billion. Another says it loses tens of billions. Zucman estimates California billionaire wealth at roughly $2.3 trillion and then reduces the projection for avoidance, evasion, and some residency changes before the January 1, 2026 cutoff. Rauh says the migration assumption is too optimistic. His analysis identifies at least seven major billionaires who had already left, including Larry Page, Sergey Brin, Peter Thiel, Don Hankey, Steven Spielberg, Travis Kalanick, and David Sacks, removing roughly $30 billion of potential revenue before the ballots were cast. Proposition 40 is deliberately retroactive to people who were California residents on January 1, 2026, and it attempts to reach assets located around the world. Rauh expects constitutional challenges involving retroactivity, due process, and valuation of private-company interests. The larger argument is not about the one-time tax. It is about years or decades of lost income-tax revenue if the taxpayers permanently relocate. Florida and Texas impose no personal income tax and no wealth tax. Redomestication can move an existing company without dissolving it. Tomorrow’s vote will not answer the economic question. It will merely begin the experiment. Learn about getting your corporation out of California: https://www.cummings.law/redomestication/move-business-out-of-california/

Attorney and CPA Chad D. Cummings notes that California has not even voted on Proposition 40 yet, and some of the people the tax is designed to reach are already gone. The New York Post reports that at least seven billionaires with a combined fortune approaching $540 billion have cut ties with California amid the proposed wealth tax, citing a Stanford study published in October. That represents roughly 30 percent of the state’s billionaire wealth. Auto-finance billionaire Don Hankey says he moved to Las Vegas last December, immediately before Proposition 40’s January 1, 2026 residency cutoff. The measure would impose a one-time 5 percent tax on covered wealth above $1 billion for people who were California residents on that date. More than 100 economists, including four Nobel laureates, are cited as warning about the migration it may cause. California’s own official voter guide acknowledges the possibility of an ongoing reduction in state income-tax revenue as billionaires change residence. The Legislative Analyst estimates that loss could eventually amount to hundreds of millions of dollars annually, possibly approaching $1 billion. A residence can change, the next company can be founded elsewhere, and the next major stock sale can occur after a new domicile is established. Florida and Texas impose no personal income tax and no wealth tax. Redomestication can move an existing company without dissolving it. Capital does not disappear when it leaves California. It reappears somewhere else and begins compounding there. Learn more about getting your LLC out of California: https://www.cummings.law/redomestication/move-business-out-of-california/

Attorney and CPA Chad D. Cummings notes that California business owners focused only on Proposition 40 may be watching the wrong tax. The billionaire wealth tax appears to be losing support as the November election approaches, but Proposition 3 is moving in the opposite direction. It would make California’s existing higher income-tax rates permanent for single taxpayers earning more than $371,000 and married couples earning more than $742,000. A UC Berkeley Institute of Governmental Studies poll found 54 percent of likely voters supporting the measure and 37 percent opposing it, the only one of seven measures surveyed with support above 50 percent. Those higher rates were enacted in 2012 during a budget deficit, extended in 2016, and are scheduled to expire after 2030. Proposition 3 would remove the expiration date. They currently generate between $5 billion and $15 billion annually. For pass-through owners, business income lands on the individual return, and for taxpayers above $1 million the higher rates already sit on top of California’s separate 1 percent mental-health tax. Recent polls put Proposition 40 at 46 percent and 44 percent support while Proposition 3 polls better. The electorate can reject a one-time 5 percent wealth tax and still make existing higher rates permanent. Florida and Texas impose no personal income tax. Redomestication can move an existing company without dissolving it. When temporary taxes repeatedly become permanent, the rational planning assumption is that today’s burden is the floor, not the ceiling. Learn about exiting your company from California: https://www.cummings.law/redomestication/move-business-out-of-california/

Attorney and CPA Chad D. Cummings notes that California does not currently impose a general exit tax simply because you move yourself or your business out of the state. Residents are taxed on worldwide income while they are residents, and former residents can remain subject to California tax on California-source income after departure. There is no standalone tax imposed merely because you crossed the state line. The irony is that an owner trying to escape a nonexistent exit tax can create something economically similar by getting the redomestication wrong. Dissolving the California entity too early, forming what is actually a new company, or filing documents that do not accomplish the intended transaction can raise questions about the EIN, an S election, contracts, appreciated assets, and whether California still considers the original entity active. Assembly Bill 2088 in 2020, Assembly Bill 310 in 2021, and Assembly Bill 259 in 2023 all contemplated continued wealth-tax exposure for former residents. None became law. Proposition 40, on the November 3 ballot, would impose a one-time 5 percent tax on qualifying billionaires who were California residents on January 1, 2026, using wealth measured at the end of 2026. It is not current law, and it is not a traditional exit tax because the legal trigger is not the act of leaving. Florida and Texas impose no personal income tax. Redomestication can move an existing company without dissolving it. The expensive risk is not a secret tax on departure. It is botching the legal transition and creating the closest thing you will ever experience to a California exit tax. Learn about the California exit tax: https://www.cummings.law/redomestication/move-business-out-of-california/